Cleveland Clinic Health System Obligated Group - FMSbonds.com

THE LEASEThe Lease contains various covenants, terms and conditions, certain of which are summarized below.Reference is made to the Lease for a full and complete statement of its provisions.CONVEYANCE AND TERMThe State, acting by and through the Commission, collectively as lessor, and the Cleveland Clinic, as lessee,have entered into the Lease. The Lease provides that the Leased Premises will be leased by the Commission to theCleveland Clinic for the Lease Term, which is at least as long as the Bond Indenture is outstanding and terminatingupon the exercise of the Cleveland Clinic’s option to terminate under the Lease or in the event of the exercise of theremedies permitted under the Lease or at law upon the occurrence of an Event of Default.RENTThe Cleveland Clinic is obligated in the Lease to pay Basic Rent, Additional Payments and certain otherpayments.Basic Rent is payable to the Bond Trustee during the term of the Lease in an amount sufficient to effect thepayment of the Bond Service Charges on the Outstanding Series 2008A Bonds and to make required payments intothe Special Funds created by the Bond Indenture. If Additional Bonds are issued by the Commission, the Lease willbe amended to increase Basic Rent so that it will be sufficient to pay Bond Service Charges on the OutstandingSeries 2008A Bonds and any Additional Bonds and to make payments into the Special Funds as required by theBond Indenture. The Basic Rent is payable on or before each Rental Payment Date. Payments of principal of andinterest on the Master Notes pledged under the Bond Indenture will be credited against the required payments ofBasic Rent.ABSOLUTE OBLIGATION TO PAY BASIC RENT AND ADDITIONAL PAYMENTSThe obligations of the Cleveland Clinic to pay Basic Rent, Additional Payments and any other amountspayable, and to perform and observe the other agreements on its part contained in the Lease are absolute andunconditional. Until all conditions provided in the Bond Indenture for release of the Bond Indenture are met, theCleveland Clinic (i) will not suspend, reduce or discontinue payment of any Basic Rent or Additional Paymentspursuant to the Lease, (ii) will perform and observe all of its other agreements contained in the Lease, (iii) will makeall payments of principal on and premium, if any, and interest on all of its indebtedness and any of its otherobligations, and (iv) except upon exercise of its termination options as provided in the Lease, will not terminate theLease for any cause.NO ABATEMENT OR DIMINUTION OF BASIC RENTNo release, grant or conveyance effected under any of the provisions of the Lease shall entitle theCleveland Clinic to any abatement, or diminution of the Basic Rent, Additional Payments or other amounts payable,or in any covenant, agreement or obligation of the Cleveland Clinic, under any Foundation Document.RELEASE OF PORTIONS OF THE LEASED PREMISESThe Lease provides that the Cleveland Clinic may substitute property constituting part of the LeasedPremises, provided that the suitability of the Leased Premises as Hospital Facilities is not impaired. Subject to theprovisions of the Master Indenture (see “SUMMARY OF BASIC DOCUMENTS — THE MASTER TRUSTINDENTURE — TRANSFERS OF PROPERTY”), the Cleveland Clinic retains the discretionary right to remove bothreal and personal property from the Lease, the Base Lease and the leasehold estate. The Cleveland Clinic and theCommission may release and remove from the Base Lease and the Lease any part of or interest in the Leased RealProperty which is no longer cost-effective to the operation of the Leased Premises.C-47